Discount Retailer Faces Financial Challenges
- B&M CFO Mike Schmidt departing from business
- £7m accounting error affects annual earnings
- Second profit warning in two weeks
- Overseas freight costs not recognized in cost of goods sold
- Adjusted profits forecast between £470m and £520m
- Previous estimate was £510m to £560m
- First half profits down from £198m to £191m
- System issue fixed, external review commissioned
- Update on 13 November
B&M Bargains’ Chief Financial Officer (CFO) Mike Schmidt is leaving the company following a £7 million accounting error that has led to a second profit warning in two weeks. The variety store chain discovered that £7 million of overseas freight costs were not correctly recognized in the cost of goods sold after an update to its operating system earlier this year, resulting in adjusted profits for the year to March 2026 being forecast between £470 million and £520 million, down from a previous estimate of £510 million to £560 million. The first half profits are now expected to be £191 million, a decrease from £198 million. B&M informed investors that Schmidt will depart as CFO but remain with the group until a replacement is found. The retailer has fixed the system issue and plans to commission an external review, providing a further update on November 13 when it publishes its first half results. In a statement, B&M expressed well wishes for Schmidt’s future.
Factuality Level: 8
Factuality Justification: The article provides accurate and relevant information about the departure of the CFO and the accounting error, as well as the company’s response and future plans for an external review. It also includes a statement from B&M. However, there are some minor issues with dates (e.g., ‘March 2026’ should be ‘March 2023’).
Noise Level: 4
Noise Justification: The article provides relevant information about a company’s financial issue and the departure of its CFO, but it lacks in-depth analysis or exploration of the consequences of the decision on those who bear the risks, as well as actionable insights or solutions. It also does not stay entirely on topic, with an unrelated link to sign up for a newsletter.
Financial Relevance: Yes
Financial Markets Impacted: B&M Retail, financial markets potentially impacted by the accounting error and profit decline
Financial Rating Justification: The article discusses a £7m accounting error that has led to a reduction in B&M Retail’s annual earnings and profit forecasts. This can have an impact on the company’s stock price and investor sentiment, thus affecting financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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